Credit Suisse is set to merge with rival UBS in a rescue deal worth more than $3 billion.

Sources familiar with the matter told the Financial Times that the Swiss National Bank (SNB) is offering UBS a $100 billion line of liquidity as part of the deal.

The lender’s woes began after its shares plummeted by 20 per cent last week in the wake of Silicon Valley Bank’s (SVB) collapse, which spooked investors throughout the financial ecosystem.

The bank’s top shareholder, Saudi National Bank, also confirmed that it would not provider further capital for the bank were there a call for more liquidity.

Following negotiations over the weekend, Credit Suisse concluded that it would be in the “best interests” of their shareholders and their stakeholders to enter into the merger solution.

“This move comes after the Swiss Federal Department of Finance, the Swiss National Bank and FINMA asked both companies to conclude the transaction to restore necessary confidence in the stability of the Swiss economy and banking system,” Credit Suisse said.

The Swiss Financial Market Supervisory Authority (FINMA) has approved the merger and said it “welcomes” the takeover solution which was shepherded in by the Swiss Confederation and the SNB.

FINMA said the SNB’s liquidity assistance would provide “sufficient liquidity” to carry out the takeover.

“On this basis, it will be possible to continue all the business activities of both banks with no restrictions or interruptions,” it said.

FINMA added that the collapse of SVB intensified a recent “crisis of confidence” for scandal-hit Credit Suisse, which most recently found “material weaknesses” in its financial reporting processes after the Securities and Exchange commission probed its finance statements.

“There was a risk of the bank becoming illiquid, even if it remained solvent, and it was necessary for the authorities to take action in order to prevent serious damage to the Swiss and international financial markets,” FINMA said.

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